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As provided above, Mr. Rahill was to transfer all of his
client records and work papers to petitioner, and
petitioner assumed no liabilities and received no rights
to any of Mr. Rahill's accounts receivable.
There is attached to the agreement a list of the 206
clients who made up Mr. Rahill's accounting practice. The
agreement calls for Mr. Rahill to refrain from soliciting
the business of or otherwise performing services for any
of the listed clients for a period of 4 years, unless
expressly requested by petitioner. The agreement provides
as follows:
4. Covenant Not to Compete Rahill agrees that,
from and after the date of this Agreement for a
period of four (4) years, he will not (unless
acting upon a request of Welch), directly or
indirectly, solicit business from the existing
clients listed on Schedule A or perform directly
or indirectly any service for any of the existing
clients listed on Schedule A of a nature which
could have been rendered by Welch.
The agreement makes no provision for the abatement or
termination of the payments to Mr. Rahill or his assigns
in the event of Mr. Rahill's death or disability. The
agreement contains Mr. Rahill's representation and warranty
that the payments received under the agreement are for his
covenant not to compete and that the payments would be
reported for Federal income tax purposes as "ordinary
income." The agreement states as follows:
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Last modified: May 25, 2011